Single firm paid €365k for 3 non-tendered projects

SENIOR HSE officials running a major hospital charity spent €365,000 on three non-tendered projects from a single company.

A HSE audit obtained by the Irish Examiner has found the significant expenditure occurred at the Cork University Hospital (CUH) Foundation, “without evidence the market has been sufficiently tested”.

The inquiry found there were “fundamental” internal control weaknesses in the group, which was set up to ensure donated money from patients, families and private individuals was spent as requested.

However, it has concluded that there was “no evidence” of fraudulent activity.

According to the internal audit, the €365,000 expenditure occurred “without recourse to tendering or the receipt of written quotes” for three projects by epidemiologist Dr Michael Crowley and two members of DCOL Statistical Consultants.

These projects resulted in two reports being concluded in May and October of 2009 on patient flow in CUH’s emergency department and inpatient services.

The internal audit states that “neither of the above projects were procured in accordance with the HSE procurement policy” and that it “could find no evidence to suggest written quotations were sought or tenders invited from interested parties for this work”.

The group’s then director and secretary, CUH chief executive Tony McNamara — who remains a director of the foundation’s new board — said in correspondence from February 2008, obtained by the audit, that the charity was “mandated to contract with whom-soever it wished”.

However, the internal audit has concluded that the “foundation should adopt the HSE procurement policy for future planned expenditure... [to] help demonstrate a commitment to obtaining value for money from charitable fund expenditure”.

The report noted that the recommendations have been agreed by HSE management.

In addition to the €365,000 provided, a separate Dáil Public Accounts Committee report — instigated after an Irish Examiner investigation last year — found Dr Crowley also received €101,000 in taxpayers’ money from CUH for the emergency department project.

This money was provided between April 24 and September 26, 2007, and was “not subject to a tender exercise as required by HSE national financial regulations”.

These regulations state that any project exceeding €50,000 and paid for through public money must be tendered.

Mr McNamara told the Public Accounts Committee audit that the project was not tendered because of the specialist epidemiological and statistical nature of the work which was involved.

However, the committee’s report concluded that “the expenditure incurred by CUH in relation to work carried out by Michael Crowley was not procured in accordance with the relevant national financial regulations.

“This work should have been subject to a full tender exercise, or if not there are very specific authorisation processes and approvals that should be adhered to.

“The chief executive of CUH has been reminded of the absolute necessity for compliance with the HSE national financial regulations,” it added.

A HSE spokesperson said last night that the foundation is now in compliance with all HSE national financial procurement regulations and charitable fund policies.